No one seems to have any idea what UNCTAD does, but it has made the smartest development statement I’ve seen from a UN agency lately:
“Africa now accounts for about 1% of global manufacturing, and cannot realistically hope to reduce widespread poverty if its governments don’t take effective measures to expand this vital economic sector”
A lot of people will say, “that kind of obvious, and of course the rest of the UN knows that.” I look at the bulk of programs and actions and respond: “Could have fooled me.”
Source. Will be interesting to see if to gets mentioned anywhere other than African newspapers.
To the PhDs out there, searching for dissertation inspiration: industrial development — no one knows how to do it, but it’s the most important thing in the world. The next big thing in economic theory and empirics as the RCT fad fades?
9 Responses
The Japanese, South Koreans, Chinese, Singaporeans, and Malaysians know how to do it. Of course they’ll be first to tell you cultural and other factors make replication of their models easier said than done.
Then there’s this book: http://www.amazon.com/How-Rich-Countries-Poor-Stay/dp/1845293266/ref=pd_bbs_1/104-1717910-1523166?ie=UTF8&s=books&qid=1178723985&sr=8-1/marginalrevol-20
If you are interested in the topic, is there any way I can convince you to do a sabbatical at my school? http://www.spp.nus.edu.sg/home.aspx
I don’t know if I could set up a fancy economic model, but I’m pretty sure I can guess what the barriers to industrial development in Africa are.
In order of importance
1. High cost of exporting
2. Limited labor pool
3. Assorted Barriers to investment
The second is being helped by rapid population growth, and the third by generally better governance. Both are being helped by better knowledge of opportunities. Trade barriers are unfortunately still a significant problem. I imagine Jeffery Sachs would be far more effective if he lobbied congress to cut agriculture subsidies and textile tariffs rather than handing out dollops of aid
“They” do know how to help job creation, the creation of manufacturing jobs by real entrepreneurs is a threat to the current gov’t and NGO power establishments.
What they don’t know is how to get industry AND stay in control, altho China did it. Without much respect for human rights, nor much UN or NGO help.
Use low cost labor, and low cost no-tarrif trade to build stuff others buy, and sell it; built in factories owned by (rich) investors, who build the factories to get richer.
It’s that last part that seems culturally unacceptable: factories built by the rich, to employ the poor, but whose purpose is to make rich investors richer.
Without supporting rich investors getting richer, you can’t expect investment.
Every country could grow up. There maybe some problems in the way of Industry there . They can be remove by the help of other developed countries.
Eh? You say this as if it is something new. But every serious organisation and commentator has said for decades that manufacturing industry and jobs are essential for reducing poverty Africa. UNCTAD, UNECA and UNIDO have been especially vocal. This is scarcely a u-turn or a change of direction.
The UK Secretary of State, Andrew Mitchell, made a good speech the day before yesterday on the role of the private sector in Africa.
http://www.dfid.gov.uk/Media-Room/Speeches-and-articles/2011/Andrew-Mitchell-on-why-trade-and-business-is-booming-in-Africa/
Instead of buying a house, should i use the capital to start a medium-sized firm in Africa? I would love to go to my deathbed knowing that i created a bunch of jobs.
But since I live in the US and don’t want to blow my margins on airline tickets back and forth to manage my new company, can I achieve some of the same goals by investing in some kind of targeted fund, and let someone else do the work?
Hmmm, if only we knew some countries that had successfully industrialized, maybe we could ask them??
Isn’t the whole “governance first” push one attempt to answer this question? As I understand it, that camp’s claim/assumption is that entrepreneurship, including industrial development, can’t take off until there are proper legal and banking frameworks and terms of trade in place. So, get the institutions right, and industrialization will follow. From your post, I gather you’re skeptical of that argument?
Relieved to finally hear this being said by the UN. Industrialisation programmes and schemes do exist out there, such as Alive & Kicking – manufacturing balls and trying to grow, but they need help…